Inside Nigeria’s multi-billion naira rice smuggling business

In this second part of his report on Nigeria’s wasting agricultural land, KUNLE FALAYI digs into the country’s rice smuggling as a major problem contributing to low capacity by farmers

Crossing from the Nigerian side of the notorious Idiroko border to Benin Republic is like walking across one street to another.

Like a thoroughfare in a commercial neighbourhood, both the Nigerian side of the border and the Beninese side play host to a plethora of businesses that take advantage of the consistent traffic.

A visitor seeking to cross into Benin Republic on foot without a passport has nothing to worry about as our correspondent would learn.

With as little as N500 rolled and inserted into the waiting hand of an immigration officer sitting at a desk on the Nigerian side, one is waved through the gate that separates the tiny Francophone country from the seventh most populous country in the world.

But this is not how the Idiroko border got its notoriety.

Here, rice smugglers get rich with ease despite the fact that the Federal Government has banned the importation of rice through land borders since March 2016.

The Idiroko border yields some of the highest number of smuggled rice in the country and plays host to the most ruthless smugglers in the business.

The Beninese side of the Idiroko border

As recently as May, a bloody shootout between rice smugglers from the Idiroko border and Customs officials resulted in the death of a driver and the burning down of some patrol vehicles of the Nigeria Customs Service.

Between January and September 2016 alone, the Nigeria Customs Service seized 5.85 million kilogrammes of rice smuggled in through the land borders. That translates to 117,000 bags in 50kg packages.

The spokesperson for the NCS, Mr. Joseph Attah, stated that the service made rice seizures 1,933 times in 2016. The total duty paid value of those seizures is N1,299,433,530 ($3.5m)

Between January and June 2017 alone, the NCS had already intercepted large scale smuggled rice 1,156 times. The seizures have combined DPV of N746, 977,000 ($2m).

Yet, findings suggest that these seizures are mere tips of the iceberg compared with the actual amount of smuggled rice which make it into the Nigerian market.

‘Rice ban made us rich, we too enrich Customs men’

Despite the Federal Government’s promise of self-sufficiency in rice production in the country before the end of 2018, the massive smuggling of rice continues to be the industry’s biggest enemy, our correspondent has learnt.

At the Idiroko border, business of rice smuggling booms more than ever.

But while the Nigeria Customs Service wages a war against rice smugglers, it struggles to track some of its men who have turned informants to smugglers.

Some smugglers told Saturday PUNCH that shipping rice in large quantities into Nigeria is almost as easy as crossing on foot at the border despite the ban on rice.

The tonnes of rice that exactly get through the land borders of Nigeria may never be known. But a two-day investigation at the Idiroko border was revealing.

At Idiroko, both rice merchants and smugglers with whom they work hand-in-hand are wary of intrusive questions that may expose their illegalities.

But our correspondent would later meet Sunday Delani (surname has been changed to protect his identity) who made startling revelations about the business.

He did not mince words in saying that rice smuggling was booming at the border in collusion with some Customs officials.

Delani laughed off the idea that bringing in rice from across the border must be tougher now since the ban.

“It has never been this easier to bring in rice to Nigeria. In fact, if we buy 10,000 bags (50kg bags) of rice this week, we will deliver it to you.”

The first time our correspondent contacted him, he was stuck in a forest with a vehicle he was using to transport a shipment of rice from across the border which had a flat tyre.

For that shipment, Delani paid a total of N2.5m to his friends in the Customs service.

He said, “This is the last batch of 2,500 bags I am bringing in and on each bag, we paid N1,000. Actually, they are supposed to be 3,700 bags but the woman I am delivering the rice to has not paid for the remaining 1,200 bags. But I am angry right now because the Customs have taken some of the bags.

“It is not unusual. After we have paid them for the shipment, they still collect a few bags, which they take to their office as seizure. We call it ‘sacrifice’.

Unfortunately, the cost of those bags used as ‘sacrifice’ would be deducted from what the owner of the merchandise is supposed to pay me.”

A few hours spent talking to some smugglers at the border soon revealed that the concept of ‘sacrifice’ was seen as a necessity by both smugglers and Customs men.

They said it is the only reason they are able to operate successfully and still help their informants among the Customs officials to save face.

Like Delani, a 41-year-old man, Victor, an apparently fake name he chose because he was reluctant to share his trade secrets, has smuggled rice into Nigeria for more than a decade.

Victor had lived most of his life in Cotonou, Benin’s port city.

When he eventually opened up, his explanation about the concept of ‘sacrifice’ was similar to what Delani said.

He said, “There are times we load up to 35 vehicles because the Customs men don’t allow large shipments at once. So, if we have a shipment of about 4,000 bags of rice, we have to share them into more than 30 smaller vehicles.

“Sometimes, they may give us discounts by foregoing the payment over three of those 35 vehicles. But on the remaining 32 vehicles, they get at least N1,000 on each bag of rice loaded in which we pay by cash during each journey.

“When it is time to offer a ‘sacrifice’, our insiders inform us and we do what is necessary. We go across the border and buy cheap and bad quality rice and load it up in rickety vehicles. We take this to a designated spot and abandon it. The Customs then take this and parade it as ‘seizure.’

“Then all you read and see is about seizures of smuggled rice in the news.”

Delani speaks with some of his rice suppliers at the border

On the day Delani took our correspondent on a tour of his customers’ shops at the border, the unassuming stocky man in his late 30s, walked around the area like he owned the place, introducing our correspondent as a prospective customer.

Since 1999, Delani had regularly smuggled goods across the border – usually rice and vehicles. To import goods legally as well, he said he is the man to call upon.

He became so familiar with the border area that when it was time for him to get married, he again went across the border to choose a Beninese wife.

Once across the border in Benin, Delani took our correspondent from one rice merchant to another, each of whom hailed him by his first name. The regular business they did together was obvious.

Each shop visited had few bags of rice, which he explained were merely for display.

In each shop, there were at least 20 different rice brands with names like Cap, Aroso, Day to Day, Simba, Happy, Nanji, Reve, Master Chef – all showing that they were products of either Thailand or India.

Delani explained that customers choose the brand of their choice and the shop owner proceeds to a warehouse to arrange the shipment.

At the shop of one of Delani’s customers, a Beninese woman popularly called Iya Aroso by those familiar with her, counted a bundle of Nigerian currency. She spoke Yoruba fluently.

“How many bags of rice do you even need sir?” she directed her question to our correspondent.

Five thousand bags, she was told.

“Can you give me till tomorrow?” she replied.

Delani would later assure that each of the traders could arrange up to 10,000 bags at a moment’s notice as long as money was ready.

“I had to quit the smuggling of rice for a while because it became increasingly hard and unprofitable. When it was legal to import it through this border, the Customs men were very tough on us. But as soon as the government banned it, some Customs men found us a solution,” he said.

What the land border ban created, according to him, is a system that allowed some Customs officials to make huge amount of money.

The 2017 National Corruption Survey released recently by the Nigerian Bureau of Statistics shows that Customs officials are the fourth most corrupt government officials in the country.

Delani said, “What we were paying as import duty on rice before the ban went into the pockets of Customs men now. We are having a swell time because the ban is forcing people to patronise us. We in turn make Customs officials rich.

“Since the importation was banned last year, I have taken more than 10,000 bags of rice across the border.

The number of bags of rice I smuggle in a week depends on scarcity of rice in Lagos.”

In the two days our correspondent spent around the border, Saturday PUNCH observed that there was no sign of any vehicle conveying rice in large quantity.

Delani laughed when asked about this and went on to explain that the smuggling business had become more organised than many people realised.

He said, “I work within a group of about seven (smugglers). The least any of us handles is 1,000 bags. When people say rice importation has been banned through the land borders, people like us just laugh.

“We have a leader. How we operate is that each person shops for the rice he has been contracted to supply. Any week we have a large shipment, we gather everything together. We load them up on the same trailers.

“Sometimes, it may be 5,000 bags altogether and sometimes 4,000. Then, our leader approaches our contacts in the Customs to arrange how the cargo gets through the border.

“We pay the Customs officials N1,000 on each bag of rice and we are issued a time, date and route we could pass through that is not being monitored. Usually, we cross the border around 11pm.”

On the Benin side of the border, a five-minute motorcycle ride takes one to an expansive compound used as a park by trailers loaded with various kinds of goods waiting to cross into Nigeria.

Delani and other smugglers who spoke on condition of anonymity, explained that large shipments of rice were loaded in trailers at the park.

From the trailers, they are then distributed in smaller vehicles on days of shipment. These are days when smugglers receive signals from their “friendly” Customs officials that the coast is clear for them to take their shipments across the border.

“Many of those trailers are filled with rice,” a guide said as he gestured at the hundreds of trailers parked in the compound covered with tarpaulin.

Trailers loaded with all kinds of goods await the cross into Nigeria

The Comptroller of Customs, Ogun State Area Command, Sani Madugu, under whose jurisdiction the Idiroko border falls, explained that it was true that rice smuggling in the area was alarming. He is also bent on fishing out corrupt officials under his command.

“We are seizing rice on a daily basis and we store them in our warehouse. Usually, we take them to the Internally Displaced Persons’ camps in the country. For instance, the Ogun State Command actually contributed 18,000 bags to the IDPs recently. That is 30 trailers of rice at 600 bags per trailer. Yet, we still have so much in our warehouses. This is how bad the problem is,” he said.

According to Madugu, it is a challenge keeping an eye on the numerous informal borders through which smugglers bring in rice on a daily basis.

He said in addition to this, motorcycles loaded with six or seven bags each and making numerous journeys through difficult terrains, were making Customs’ job increasingly difficult.

He said he was aware of the collusion with some men in the service as an intelligence unit was always on the lookout for such officials who were usually fired when caught.

He told Saturday PUNCH, “The Nigeria Customs Service is doing a lot in apprehending officers who collude with smugglers. Recently, the service dismissed some officers because they were sabotaging the efforts of the service by giving information to smugglers or helping them to get contraband through the border.

“Fighting smugglers is not an easy job because it is a very lucrative business. Some young men and women make up to N300,000 per month through petty smuggling. You can imagine how much the major smugglers make.

“However, we are devising new means to curtail their activities. And the problem is not just rice. We recently intercepted 5,000 cartons of frozen poultry products on a single night. We destroyed everything.”

Rice production Vs rice smuggling

When the Federal Government banned the importation of rice through Nigeria’s land borders as part of efforts to make the country self-sufficient, local producers and rice farmers’ unions in the country were in celebration.

Being the 11th highest consumer of rice in the world after Brazil makes the market a passport to wealth for every farmer.

But stakeholders say as long as the country is unable to control its rice smuggling problem, development in the industry will continue to be weighed down.

In November 2016, the NCS raised the alarm that one million tonnes of smuggled rice was heading for Nigeria.

in January, the Minister of Agriculture and Rural Development also alerted that 571,000 cheap rice had just arrived Benin Republic, adding that it was fairly certain they were headed for Nigeria.

The Managing Director of Agro Nigeria, Mr. Richard Mbaram, said whatever smuggling was going on at the Idiroko border was a tiny fraction of the smuggling being carried out at the northern borders of Nigeria with Niger.

“I have reports of trailer-loads of rice coming into the country every single day. A trailer load of rice is not a coin that you put in your pocket. It is a massive vehicle that cannot even go through bush paths. So, the fact that these trailers move on the road freely without being intercepted suggests a high level of collusion with Customs officials. The report we are getting is that the smugglers pay Customs officers at those land borders in the North up to N400 on each bag,” he said.

At the Idiroko border, smugglers also use fuel tankers to conceal rice

Import duty on rice at the seaports increased to 60 per cent but this seems to only make smuggling the solution for rice merchants who cannot afford the huge duties.

Vice President of the Rice Farmers Association of Nigeria, Mr. Segun Atho, said, “With the current duty on rice at the seaport, there is no sane businessman who would want to import rice through the seaports.

“Unfortunately, most of the smuggled rice which Nigerians eat is expired because freshly produced rice from other countries is costly.

“Some of the expired rice have been in stores for eight to 10 years and are sold for less than a quarter of the price of the fresh ones.”

Professor of Agricultural Economics and Farm Management, Idris Ayinde, who has conducted extensive research on Nigeria’s unsustainable food importation, explained that he was aware that rice smugglers worked in connivance with Customs officers, who are vested with the responsibility of checking the problem.

He said, “The wives of military and paramilitary officials are also involved. I personally know the wife of a top police officer who is involved. She would always have rice stocks even when all the warehouses in town are dry.

“Unfortunately, the process of smuggling, which we call border trading in economics, does not add any value to the Gross Domestic Product, which shapes the economy of a country.”

This story was supported by Code for Africa’s impactAFRICA fund and the Bill & Melinda Gate Foundation.